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Simi Valley is taking steps, like next-door neighbor Thousand Oaks, to place a measure on its Nov. 6 ballot that will ask the city's voters to approve taxing marijuana businesses in town.(Photo11: ASSOCIATED PRESS)

Simi Valley is taking steps, like next-door neighbor Thousand Oaks, to place a measure on its Nov. 6 ballot that will ask the city’s voters to approve taxing marijuana businesses in town.

Fillmore is currently the only city in Ventura County with a cannabis business tax, which was approved by that city’s voters in 2016. The City Council banned all commercial marijuana activities the following year, but on Tuesday night, it was scheduled to consider placing a measure on the city’s November ballot which, if it passes, would allow limited medical marijuana cultivation that would be taxed.

Like Fillmore, Simi thus far is not allowing any commercial marijuana enterprises in the city.

So why the need for a cannabis business tax?

Simi Valley Deputy City Manager Samantha Argabrite said it’s a pre-emptive move, just as Fillmore officials said theirs was.

“The City Council wants to get ahead of any changes that may occur with regard to local control and cannabis,” she said.

For example, she said, proposed state legislation, Senate Bill 1302, would prohibit local bans on marijuana deliveries.

“While the City Council has banned deliveries into the community, if state law changes, requiring us to allow them, then the city will be positioned to collect tax on those deliveries” should the tax measure be approved by voters, she said.

“Additionally, should a citizen initiative be proposed changing the council’s direction on what cannabis uses are allowed in Simi Valley, a tax measure could already be in place,” she said.

Even so, all commercial cannabis activity can be banned in the city and the council can still “put forth a tax measure to the voters,” Argabrite wrote in a memo to the council.

At its May 14 meeting, the council reviewed a draft of the proposed cannabis business tax ordinance and signaled that it wants to move ahead with placing the measure on the city’s Nov. 6 ballot.

“I think it’s very important,” said Councilman Mike Judge.

A public hearing will be held on the proposed measure at the council’s June 4 meeting, and if the measure is approved afterward, it will be included in the city’s “call for (Nov. 6) election” agenda item at its June 18 meeting.

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Twenty-nine states and Washington D.C, have legalized the use of medical marijuana and on top of that, nine states have legalized recreational pot. Why was it illegal in the first place?

Currently, the measure would pass if approved by a simple majority of voters. But, if a proposed statewide ballot measure, the Tax Fairness, Transparency and Accountability Act, makes it onto the November ballot and passes by a two-thirds margin, all proposed local tax measures, including Simi Valley’s and Thousand Oaks’, would also need to pass by a two-thirds vote. The act would retroactively apply to all such local tax measures in 2018.

For instance, the proposed tax on a dispensary would be 4 percent initially with a maximum tax of 6 percent. The proposed tax on a testing lab would be 1 percent initially with a maximum tax of 2.5 percent.

It would be up to the City Council to increase the tax rates to the maximums if it wanted to at some point, Argabrite said.

Those are the same proposed rates that Thousand Oaks is taking steps to include in its marijuana business tax measure on the Nov. 6 ballot.

Unlike Simi Valley and Fillmore, Thousand Oaks has decided to allow one medical marijuana dispensary and one marijuana testing facility in an industrial-zoned part of town if applicants pass the city’s four-stage comprehensive review and selection process.

If approved by voters, Thousand Oaks’ marijuana business tax would go into effect Jan. 1 if a dispensary and/or testing facility is operating by then. The City Council hopes to select the operators in July.

On top of being taxed by the city, the businesses would also be taxed by the state.

“The initial tax rate would become effective Jan. 1 and then if later on down the road, the council decides to lower it or raise it, they can do so, but they can only do so up to that maximum amount.”

Melissa Hurtado, city's revenue operations manager

The Thousand Oaks City Council on April 24 unanimously directed staff to draft the ballot measure. The proposed measure will be brought back to the council at its June 5 meeting for its approval to place on the Nov. 6 ballot, said Melissa Hurtado, the city’s revenue operations manager.

Like Simi Valley, the Thousand Oaks tax rates may never go up to their maximums. That would be the City Council’s decision, Hurtado said

“The initial tax rate would become effective Jan. 1 and then if later on down the road, the council decides to lower it or raise it, they can do so, but they can only do so up to that maximum amount,” she said.

The tax revenue would go into the city’s general fund and could be used for many purposes, including supporting law enforcement activities related to marijuana compliance and education, Hurtado said.

According to both Argabrite and Hurtado, although Port Hueneme is allowing a variety of cannabis business activities in the city, it has not yet proposed a tax measure. Instead, the city requires a development agreement that incorporates a fee payable to the city of 5 percent of gross receipts.

Oxnard this year approved medical marijuana deliveries in the city, but has also not yet introduced a tax measure, Argabrite and Hurtado said. Medical marijuana businesses that make deliveries must pay $265 for an annual permit and another $280 for an annual driver permit.

California voters in 2016 approved Proposition 64, which legalized recreational marijuana use for persons 21 years or older statewide, but lets local jurisdictions ban such cannabis industry businesses as dispensaries and deliveries.